BILL NUMBER: SB 662	CHAPTERED  10/10/99

	CHAPTER   896
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 9, 1999
	PASSED THE SENATE   AUGUST 31, 1999
	PASSED THE ASSEMBLY   AUGUST 26, 1999
	AMENDED IN ASSEMBLY   JULY 15, 1999
	AMENDED IN SENATE   APRIL 15, 1999
	AMENDED IN SENATE   APRIL 8, 1999

INTRODUCED BY   Senator Figueroa

                        FEBRUARY 24, 1999

   An act to amend Section 2105 of the Corporations Code and to add
Section 1524.2 to the Penal Code, relating to search warrants.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 662, Figueroa.  Search warrants:  foreign corporations.
   (1) Existing law authorizes a court or magistrate to issue a
search warrant for the search of a place and the seizure of property
or things identified in the warrant where there is probable cause to
believe that specified grounds exist.  Federal law requires
disclosure to a governmental entity by a provider of electronic
communication service or a remote computing service of the contents
of an electronic communication that is in storage, as specified, only
pursuant to a warrant issued according to law.
   This bill would apply to any search warrant issued by a court or
magistrate allowing a search for records in the actual or
constructive possession of a foreign corporation that provides
electronic communication services or remote computing services to the
general public, where those records would reveal specified
information about a customer of that corporation.  The bill would
require such a foreign corporation to provide to a peace officer who
has a search warrant issued by a California court, all records
identified in the warrant within 5 business days of receipt, or
within less time upon specified conditions.  The bill would provide
procedures for the foreign corporation to verify the authenticity of
the records and to avoid production of the record.  In addition, the
bill would prohibit a cause of action against any foreign or
California corporation or its officers, employees, or other specified
persons for providing records in accordance with a search warrant
issued pursuant to the bill.  By increasing the duties of local
officials, this bill would impose a state-mandated local program.
   (2) Existing law prohibits a foreign corporation from transacting
intrastate business without first obtaining a certificate of
qualification from the Secretary of State.  To obtain that
certificate, the foreign corporation must file a signed statement
with specified information regarding the corporation, including the
name of an agent who may be served with process within this state,
and an irrevocable consent to service of process as specified.
   This bill would amend the provision governing irrevocable consent
to service of process to include service of a search warrant issued
pursuant to the provision summarized in (1) for records or documents
that are located outside of this state whether or not the foreign
corporation is a party or a nonparty to the matter in which the
search warrant is sought.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement, including the creation of a State Mandates Claims Fund
to pay the costs of mandates that do not exceed $1,000,000 statewide
and other procedures for claims whose statewide costs exceed
$1,000,000.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 2105 of the Corporations Code is amended to
read:
   2105.  (a) A foreign corporation shall not transact intrastate
business without having first obtained from the Secretary of State a
certificate of qualification.  To obtain that certificate it shall
file, on a form prescribed by the Secretary of State, a statement and
designation signed by a corporate officer stating:
   (1) Its name and the state or place of its incorporation or
organization.
   (2) The address of its principal executive office.
   (3) The address of its principal office within this state, if any.

   (4) The name of an agent upon whom process directed to the
corporation may be served within this state.  Such designation shall
comply with the provisions of subdivision (b) of Section 1502.
   (5) (A) Its irrevocable consent to service of process directed to
it upon the agent designated and to service of process on the
Secretary of State if the agent so designated or the agent's
successor is no longer authorized to act or cannot be found at the
address given.
   (B) Consent under this paragraph extends to service of process
directed to the foreign corporation's agent in California for a
search warrant issued pursuant to Section 1524.2 of the Penal Code,
for records or documents that are in the possession of the foreign
corporation and are located outside of this state.  This subparagraph
shall apply to a foreign corporation that is a party or a nonparty
to the matter for which the search warrant is sought.
   (6) If it is a corporation which will be subject to the Insurance
Code as an insurer, it shall so state that fact.
   (b) Annexed to that statement and designation shall be a
certificate by an authorized public official of the state or place of
incorporation of the corporation to the effect that such corporation
is an existing corporation in good standing in that state or place
or, in the case of an association, an officers' certificate stating
that it is a validly organized and existing business association
under the laws of a specified foreign jurisdiction.
   (c) Before it may be designated by any foreign corporation as its
agent for service of process, any corporate agent must comply with
Section 1505.
  SEC. 2.  Section 1524.2 is added to the Penal Code, to read:
   1524.2.  (a) As used in this section, the following terms have the
following meanings:
   (1) The terms "electronic communication services" and "remote
computing services" shall be construed in accordance with the
Electronic Communications Privacy Act in Chapter 121 (commencing with
Section 2701) of Part I of Title 18 of the United State Code
Annotated.  This section shall not apply to corporations that do not
provide those services to the general public.
   (2) An "adverse result" occurs when notification of the existence
of a search warrant results in:
   (A) Danger to the life or physical safety of an individual.
   (B) A flight from prosecution.
   (C) The destruction of or tampering with evidence.
   (D) The intimidation of potential witnesses.
   (E) Serious jeopardy to an investigation or undue delay of a
trial.
   (3) "Applicant" refers to the peace officer to whom a search
warrant is issued pursuant to subdivision (a) of Section 1528.
   (4) "California corporation" refers to any corporation or other
entity that is subject to Section 102 of the Corporations Code,
excluding foreign corporations.
   (5) "Foreign corporation" refers to any corporation that is
qualified to do business in this state pursuant to Section 2105 of
the Corporations Code.
   (6) "Properly served" means that a search warrant has been
delivered by hand, or in a manner reasonably allowing for proof of
delivery if delivered by United States mail, overnight delivery
service, or facsimile to a person or entity listed in Section 2110 of
the Corporations Code.
   (b) The following provisions shall apply to any search warrant
issued pursuant to this chapter allowing a search for records that
are in the actual or constructive possession of a foreign corporation
that provides electronic communication services or remote computing
services to the general public, where those records would reveal the
identity of the customers using those services, data stored by, or on
behalf of, the customer, the customer's usage of those services, the
recipient or destination of communications sent to or from those
customers, or the content of those communications.
   (1) When properly served with a search warrant issued by the
California court, a foreign corporation subject to this section shall
provide to the applicant, all records sought pursuant to that
warrant within five business days of receipt, including those records
maintained or located outside this state.
   (2) Where the applicant makes a showing and the magistrate finds
that failure to produce records within less than five business days
would cause an adverse result, the warrant may require production of
records within less than five business days.  A court may reasonably
extend the time required for production of the records upon finding
that the foreign corporation has shown good cause for that extension
and that an extension of time would not cause an adverse result.
   (3) A foreign corporation seeking to quash the warrant must seek
relief from the court that issued the warrant within the time
required for production of records pursuant to this section.  The
issuing court shall hear and decide that motion no later than five
court days after the motion is filed.
   (4) The foreign corporation shall verify the authenticity of
records that it produces by providing an affidavit that complies with
the requirements set forth in Section 1561 of the Evidence Code.
Those records shall be admissible in evidence as set forth in Section
1562 of the Evidence Code.
   (c) A California corporation that provides electronic
communication services or remote computing services to the general
public, when served with a warrant issued by another state to produce
records that would reveal the identity of the customers using those
services, data stored by, or on behalf of, the customer, the customer'
s usage of those services, the recipient or destination of
communications sent to or from those customers, or the content of
those communications, shall produce those records as if that warrant
had been issued by a California court.
   (d) No cause of action shall lie against any foreign or California
corporation subject to this section, its officers, employees,
agents, or other specified persons for providing records,
information, facilities, or assistance in accordance with the terms
of a warrant issued pursuant to this chapter.
  SEC. 3.  Notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
costs mandated by the state, reimbursement to local agencies and
school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code.  If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund.
